US-china Trade: Staying On The Negotiation Path

Published 05/09/2018, 02:18 AM

China's top economic adviser and vice-premier Liu He is going to the US next week for further negotiations. This is a positive sign that the path of negotiation is still the preferred one after the US delegation was in Beijing last week.

They are still going to be tough negotiations as there are key areas where US demands are unlikely to be met.

The negotiations will probably take some time but the ultimate outcome will most likely be one of more US protectionism towards China focusing on tech products - and other goods within the sectors mentioned in the 'Made in China 2025' strategy.

However, while we will probably end up with more US protectionism towards China, our baseline scenario is still that a tit-for-tat trade war with continued escalation will be avoided.

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